Pomp and Austerity In Manila

Manila is not yet a standard stop on the international convention and curiosity circuit, but it seems to be trying. Two years ago, the Philippine capital played host to the Miss Universe Contest, and last year it had the Ali-Frazier heavyweight title bout. Last week the city rolled out the carpet for 1,500 leaders of international finance and banking who gathered to attend the first annual meeting of the International Monetary Fund and World Bank ever held in Southeast Asia.

Philippine President Ferdinand Marcos spared no expense to pamper his influential guests. They were housed in 14 shiny new glass-and-cement hotels fitted out with such amenities as outdoor golf ranges and waterfalls in the lobbies. Meetings were held in the dazzling, just finished $125 million convention center. To keep the finance ministers and bankers amused between sessions, Marcos and his wife Imelda also brought in an exhibit of ancient Egyptian treasures, the Soviet Union's Bolshoi Ballet and, from the U.S., Pianist Van Cliburn and Metropolitan Opera Soprano Montserrat Caballe. Even the shanties in the city's slums were freshly whitewashed for the occasion. "It is our hope," Marcos cracked at one dinner for IMF and World Bank officials, "that all this does not disqualify us from seeking aid."

Soaring Prices. The delegates had come to Manila not seeking pomp but a further expansion of the relationship between rich and poor nations, partly in the concrete form of increased aid from the IMF, the World Bank and the bank's subsidiary, the International Development Association, which makes "soft" long-term loans that carry no interest. Largely as a result of big increases in energy and fertilizer costs, caused by soaring oil prices, poor countries without oil face debts of up to $15 billion next year.

The Third World's case was made most passionately by World Bank President Robert S. McNamara. In a long address, McNamara spoke eloquently of a need for more aid to a largely unseen population of "severely deprived human beings struggling to survive in a set of squalid and degrading circumstances." McNamara urged wealthy countries to increase the World Bank's capital (presently about $40 billion) and annual lending capacity ($5.8 billion).

Swelling Debt. But the industrial countries seemed more concerned by another challenge: the ballooning international debt. IMF Managing Director H. Johannes Witteveen said flatly that the time had come for all nations, rich and poor, to stop borrowing so much to cover their balance of payments deficits and start reducing their indebtedness.

U.S. Treasury Secretary William Simon was even more blunt. Simon, who has feuded before with McNamara over his expansive management of the World Bank, noted that oil-importing countries face a $50 billion balance of payments deficit next year. Asserting that "a substantial number of countries have preferred to delay adjustment to higher oil prices and borrow abroad to finance consumption," Simon warned that from now on "world demands for capital will be massive and competition fierce."

The atmosphere of caution and even retrenchment among the delegates from the industrial countries was understandable. The conference, lamented New Zealand's Prime Minister Robert Muldoon (who also serves as Finance Minister), was plainly "overshadowed by events." They included the political uncertainties in the U.S., Japan and West Germany, Britain's request for a $3.9 billion IMF loan to prop up its suffering pound sterling, and the growing probability of another price increase by the oil-exporting countries this winter.

But the general tone of the meeting, especially as it related to loans, the IMF and the World Bank, left most Third World delegates in a peevish mood. India's Finance Minister C. Subramaniam reflected the view of most of the poor countries: he dismissed talk about reducing deficits and snuffing out inflation as "rich-country prescriptions" and demanded more power for developing states in IMF and World Bank decisions.

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